The boss of Britain’s biggest listed firm is considering shifting its stock market listing to the US in a move that raised fears the City could become a global backwater.
AstraZeneca chief executive Sir Pascal Soriot is reportedly weighing what would be a devastating blow to the London Stock Exchange.
The move comes amid growing frustration with the UK’s rules on approving new medicines as well as a row over drug prices between the industry and the NHS.
Sir Pascal has spoken privately of his desire to move the FTSE 100 drugs giant’s listing on multiple occasions.
He has also considered moving AstraZeneca’s headquarters away from the UK as well as its main stock market listing, the Times reported, citing sources familiar with the matter.
Shares have fallen by 17 per cent over the past year. They rose 2by .8 per cent, or 282p, to 10,402p following the report.
Sir Pascal, 66, has previously criticised the UK and the rest of Europe for falling behind other countries such as the US and China in developing medicines.
In April, he said that innovation in pharmaceuticals ‘has mostly been funded by the US’ as he doubled down on plans to grow the business in America – which already accounts for 40 per cent of the company’s sales.
AstraZeneca chief executive: Pascal Soriot is the boss of Britain’s biggest listed firm
AstraZeneca, whose offices in Cambridge are pictured, is the largest company on the LSE
The company has also been heavily investing in China, which Mr Soriot considers to be a major untapped source of sales as the country’s rapidly growing middle class spends more on medicines.
Last month, the firm unveiled a tie-up with Chinese biotech firm CSPC Pharmaceuticals worth £4billion to use artificial intelligence to help create new medicines.
AstraZeneca is the largest company on the London Stock Exchange (LSE) with a value of £158billion.
A move would deal a severe blow to the beleaguered UK market, which has been hit by a number of defections in recent months including fintech Wise, construction equipment hire firm Ashtead, Paddy Power owner Flutter and plumbing group Ferguson.
It is also likely to fuel fears that other major British firms, including oil giant Shell and miners Glencore and Rio Tinto, all of whom have previously considered moving away from London, could follow suit.
But Sir Pascal, who has led the pharma giant since 2012, is likely to face stiff resistance from members of the company’s board of directors as well as from the government, which has prioritised the life science industry as one of its key areas to boost economic growth.
Sir Pascal has spoken privately of his desire to move the firm’s listing on multiple occasions
Dan Coatsworth, investment analyst at AJ Bell, warned such a move would be ‘difficult to pull off’ for AstraZeneca as alongside the government and the board the firm would be likely to face a backlash from a large chunk of its shareholder register.
But he acknowledged the company’s focus on the US could make a switch harder to resist.
Mr Coatsworth said: ‘AstraZeneca generates about 42 per cent of its sales from the US and it already has plans to increase its operational footprint in the country.
‘America is important to its growth strategy and it could become an even bigger cog in the wheel.’
Michael Healy, UK Managing Director at trading platform IG, said: ‘Another week, another potential hammer blow to the UK stock market. Rumours that AstraZeneca could be eyeing a US listing show just how serious the situation has become.
‘We’re in dangerous waters – London risks becoming a global backwater unless something changes fast.’
And Charles Hall, head of research at broker Peel Hunt. said: ‘This is another warning shot that we cannot take our capital markets for granted. Government needs to take urgent action to ensure we have a healthy market.’
Sir Pascal is knighted by King Charles III at Windsor Castle in December 2022
Relations between AstraZeneca and the UK government have become more strained since Labour came to power last year.
In January, the firm scrapped plans for a £450million expansion of its vaccine plant in Liverpool following a row with the government over financial support for the project.
The UK’s tax system was also cited by Mr Soriot in 2023 as the main reason why AstraZeneca opted to build a £262million factory in Ireland rather than Britain.
AstraZeneca declined to comment.
DIY INVESTING PLATFORMS
AJ Bell
AJ Bell
Easy investing and ready-made portfolios
Hargreaves Lansdown
Hargreaves Lansdown
Free fund dealing and investment ideas
interactive investor
interactive investor
Flat-fee investing from £4.99 per month
InvestEngine
InvestEngine
Account and trading fee-free ETF investing
Trading 212
Trading 212
Free share dealing and no account fee
Affiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.
